Jeremy Siegel: Markets Are Hoping For Conciliation In G-20 Summit

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In terms of this U.S.-China meeting tomorrow night from a market standpoint what would be the definition of success.

Well clearly the market really wants resolution of this Chinese problem. I I don't think it's going to happen at this meeting. I think the history is honestly Trump doesn't like these multilateral meetings or conferences. He's he's like a one on one guy and likes to announce things like that. And it's also he's more of a Brinks man in them in the words Let's go closer to the January 1st deadline rather than a month earlier. Now that being said if you know President Xi and President Trump exchange just kind words we're working on the problem I mean that is encouraging certainly to the market. But I would be surprised at this and I'm prepared to be surprised when President Trump is entering into any negotiation. I would be surprised if we got anything definitive between China and the U.S. out of this meeting.

Professor how should investors be prepared to be a surprise. How should they be positioned given how big this weekend is potentially.

Well I think what's interesting is that the the the words of Jay Powell Fed chairman on Wednesday have sort of taken that worry the Fed over tightening down a number of notches. So what is next on the agenda. It is the tariff war or potential tariff war with China. So clearly any sort of resolution there is is going to be positive. Let me also say that the market expects it. It's not a slam dunk but I think it's probably 80 to 90 percent baked in. So any adverse developments and I don't expect any particular word to come out of this meeting would be a great disappointment and certainly if it if it isn't solved by the end of the year if it is out by the end of the year the market will tolerate an extension of current levels without the ramping up. But it would it certainly would be getting nervous if it didn't see any progress then. Given that Germany.

If we don't get any kind of a definitive statement or movement in trade from the G-20 summit over the weekend what matters more small signals or the bullish signals that we've seen out of some growth stocks including workV.M. where the tech sector has meant a lot to this extended rally that we had seen on Wall Street. There have been some questions about how long lived that would be. But thus far a lot of these stocks seem to be showing increasingly positive signals about what they expect from 2019. Yeah. Well you know I mean we saw Trump this morning with Mexico and Canada and being very conciliatory and very positive.

Which is a good sign. And I think the market is hoping for that same sort of conciliation with President Xi and saying we are working on problems. And he said I think we will reach us live he has those words. I think we will reach a solution that's going to pump up the market poorly. But certainly I would be surprised if we saw that definitive solution actually reached at this point. I mean there were they were they were miles away on so many things. And in the original set of negotiations. But but clearly the market is hopeful for a positive tone coming out of the interactions.

Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. -
Email: jacob(at)valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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